Analyst: Tesla Model X Production Ramp Up To “Progress Quickly” Once Re-Designed Parts Become Available

Ahead of tomorrow’s Q4 earnings call for Tesla Motors, most of the major industry analysts released notes in regards to the electric automaker.

Several of the notes point towards a bleaker future for Tesla, with a lot of the analysts downgrading Tesla, but Credit Suisse analyst Dan Galves reiterated his Outperform rating for Tesla and stands behind his $325 price target.

Perhaps Galves is bullish because of some inside information he’s received related to the Model X production ramp-up.

According to Galves, Tesla had some hiccups with Model X production, but the issues are now nearly a thing of the past. Quoting Galves:

“We believe that several minor but unacceptable quality issues existed on early production…the company slowed down the line to tweak the production process (fit / finish and trim issues appear to be fully fixed) and, in some cases, to wait for re-designed parts. According to mgmt., the production process is quite dialed-in right now, there are no critical unresolved design issues, and once re-designed parts are available, the ramp should progress quickly. Meanwhile, Model S production continues to run at very high levels.”

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112 Comments on "Analyst: Tesla Model X Production Ramp Up To “Progress Quickly” Once Re-Designed Parts Become Available"

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Big Solar

sounds good

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2 years ago

Texas FFE

Yes, by all means let’s be optimistic about Tesla stock price, optimistic it will go lower. The stock price is already down over 50% from its 52 week high and down over 30% in the last month alone. Investors are abandoning this stock in droves.

The stock price sold as high as 286 back in July and 210 last month but today the stock sold as low as 140 today. It looks to me like investors are running.

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2 years ago

Nix

Texas FFE — TSLA is also up from the $20-35 dollar range it was in for years. What is your point?

All you have proven is that a volatile stock has volatile highs and volatile lows. Why choose just that one price on one day? Because it is dramatic?

Congratulations, you’ve discovered the definition of volatility, but you are no further from being able to predict the future than where you were before.

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2 years ago

Pushmi-Pullyu

Texas FFE claimed:

“There’s nothing wrong in my statement.”

LOL! Your statement very obviously contains a fundamental fallacy, Texas FFE. Every seller must have a buyer, so every TSLA stock sold must have a matching buyer. It’s simple sraightforward logic.

It would be accurate to say there is a lot of trading going on, probably an unusually high trade level even for such a volatile stock as TSLA. But it would be just as accurate to say “Investors are jumping into TSLA in droves” as to say they’re “abandoning this stock in droves”.

But hey, nice job of putting a bearish spin on things. I’m sure the TSLA short-sellers are very happy with the current state of things. They’d better be prepared to jump out soon, though… before the next, inevitable, short squeeze hits!

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2 years ago

Hari

Ha ha true.. I always think of this when people say there’s this big sale going on. A sale is a purchase from another point of view.

This is a big opportunity for all those buyers. I don’t own any stock, I want to own though!

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2 years ago

jelloslug

Yep, it’s just TSLA that is down in recent history….

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2 years ago

jerryd

All that means jello is a good time to pick up some Tesla stocks cheap for even more profit with one of the fastest growing companies in the world.
And a 10yr lock in EV’s and home, building battery tech, markets with a 20% advantage on the best competition means nice profits that is hard to challenge.
The only real way is with a composite body/chassis EV could one advance over Tesla with lighter weight, lower cost and longer range.
If VW was smart they would make a narrow Aero Van with a composite body on their chassis though a composite chassis would be better.
Done all composite 300 miles could be done with 60kwhr.
Though with 100kw fast charging 120-200-300 mile options are fine.

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2 years ago

Tech01x

Hmm… sounds like Texas FFE has had a vested interest in disparaging Tesla all this time.

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2 years ago

Texas FFE

That’s right I’m a confirmed Tesla basher. I think thier arrogant, elitist, predatory business practices are hurting the adoption of electric vehicles. I like the car but I will not buy a Tesla unless they change thier business practices.

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2 years ago

DGM73

You picked up my interest with this statement about Tesla:

“are hurting the adoption of electric vehicles”

How so?

I would argue, figures upfront, that it’s quite the opposite but maybe I’m missing something… Care to explain?

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2 years ago

Three Electrics

One small beef I have with them is that the federal tax credit is applied to the residual, not the capitalized cost, when leasing. This is an attempt to boost profitability of their used car business by preventing customers from buying their car at the end of the lease.

Besides that, I don’t see anything out of the ordinary, aside from shamelessly using their best customers to debug their terrible production processes.

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2 years ago

David Murray

GM (Ally Bank) does exactly the same thing.

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2 years ago

Texas FFE

Tesla has a great charging infrastructure but only Tesla owners are allowed to use it. Teslas are too expensive for most EV buyers. That charging infrastructure is a huge investment that takes funds out EV infrastructure development that could be used by everyone.

Tesla could have helped develop and adopt a common charging system but they decided to ignore everyone else and develop their own proprietary system. Even shorter range EVs would have found the Tesla charging infrastructure very useful and having a useful, well developed EV charging infrastructure would have spurred EV sales. As it is it’s going to take years for the CHAdeMO and CCS infrastructures to catch up with the Tesla charging infrastructure and that delay in charging infrastructure development is going to stifle EV sales.

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2 years ago

koz

You forgot to include that the CHADEMO and CCS standards and products available in 2012 sucked compared to Tesla’s Supercharging. The adapters are lousy and the charge rates were far too slow to have much value for highway driving. Tesla has absolutely done the right thing to develop a solution that is far superior. They offered the tech to all others and the rest of the industry has thumbed their nose at Tesla.

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2 years ago

Pushmi-Pullyu

Indeed.

Texas FFE is a dyed in the wool, true believer conspiracy theorist. His views of Tesla are, as they say, “not even wrong”. I dunno what planet he’s living on, but it ain’t the Earth.

We’ve previously explained in some detail, in response to previous posts of his, why no other plug-in EV would be physically able to use the Supercharger network, even with compatible plugs. We’ve explained that only Tesla battery packs have sufficient capacity to accept a 90-120 kWh charge.

But clearly Texas FFE prefers to live in the fantasy world he imagines, rather that the real one. I wouldn’t mind, if he didn’t keep trying to get the rest of us to buy into his counter-factual fantasies.

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2 years ago

Pushmi-Pullyu

Ack! That should be “a 90-120 kW charge”, not kWh charge. (Yes, I do know the difference.)

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2 years ago

H-Sonic

IMO that has always been Musk’s silver lining when the right time comes Tesla charging infrastructure will be split from the Automotive business company and guess what part he is going to keep for himself? The car business is always going to have major profitability issues but the charging network on the other hand…

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2 years ago

jelloslug

It’s not Tesla’s problem that other car makers chose not to take up Tesla’s offer to let them use the Supercharger network. Face it, Tesla has done all the right things to make a long range EV work. Not one other company even is close to actually competing with the entire package that Tesla offers.

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2 years ago

kdawg

This *logic* makes no sense.

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2 years ago

Tech01x

Tesla was part of the SAE working group for J1772 including the J1772-DC group that worked on the CCS plug. They lobbied for a plug that would work for them in 2010/2011. They were going to ship product in 2012 and the other automakers stalled them. Was Tesla supposed to wait around for them? Even with CCS combo plug did come out, it had a 200 amp limit. Tesla’s already charge at over 300 amps, so the CCS plug is unsuitable.

The existing SAE CCS Combo 1 plug will have to be revised again to support long range BEVs.

So you’ve decided that Tesla is the wrong party when the other automakers deliberately sabotaged Tesla’s efforts?

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2 years ago

Nix

Tesla has openly invited any other car maker to join the Supercharger network. Tesla has opened up their patents for any company to use.

So far, no car company has taken up either of those offers.

You are correct that other standards are far behind and will take a long, long time to catch up. That is because the business model for pay-for-use public chargers doesn’t work anywhere near as well Tesla’s pre-paid access business model.

But it is absolutely hilarious that you blame Tesla for having a highly successful business model, that is working better than any other charging network in the US. Providing more Solar and green electricity for more miles of travel than any other charging network.

I find it absolutely insane that you blame Tesla for other car companies failing to take up Tesla’s offer to use their patents free of charge, and to join Tesla in building out a supercharger network that their customers can use too.

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2 years ago

Texas FFE

I think we all can agree that the charging wars have hurt electric vehicle adoption, The Tesla standard is the only charging standard that can only be used by a single manufacturer,

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2 years ago

Nix

Texas FFE — The Tesla Superchargers can be used by ANY car maker’s vehicles who choose to take up Tesla’s offers to work with them. That is up to each car company, and they’ve refused. That’s their choice, and they own their own choices.

There is no failure at all in the Tesla supercharger system. As you have admitted elsewhere, it beats the pants off of any other charging standard, and they are all way behind.

Yes, other companies failing to keep up with Tesla has hurt their products. Their fault. Not Tesla’s.

Your sour grapes that you bought a vehicle from a manufacturer who chose to sell you a vehicle without Tesla open patent Supercharger technology, doesn’t mean Tesla is to blame for your sour grapes.

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2 years ago

Texas FFE

Talk is cheap. If anybody, even aftermarket vendors, had been able to break the Tesla code and get access to the Superchargers then I would agree with you but they haven’t. No matter what Tesla’s official rhetoric is they are not letting anyone use their Superchargers.

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2 years ago

Pushmi-Pullyu

A perfect example of invincible ignorance.

“My mind is made up; don’t confuse me with the facts!”

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2 years ago

Nix

You are insane. No, people can’t hack into Tesla’s supercharger system. Just like you can’t hack your way onto the Sprint network.

You have to go through the front door the right way by working directly with Tesla, with cars built with Tesla hardware. Name ANY company who has tried to do that and was turned away.

This is the same as I’ve got a phone that runs on the Sprint network, even though I go through a completely different company to pay my phone bill. The company I work with went through official channels directly with Sprint.

As you say, “Talk is cheap.” If you can name any reputable aftermarket company that has gone to Tesla to work on aftermarket retrofits, name them. They don’t exist. The fact that some hackers may have failed to hack their way in is meaningless.

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2 years ago

Nix

Texas FFE — “Teslas are too expensive for most EV buyers.” Model 3. Derp. “That charging infrastructure is a huge investment that takes funds out EV infrastructure development that could be used by everyone.” No, you have it wrong. None of the other car makers are building out any charging networks. Not a single one builds a network of chargers that is publicly available to everybody else. At best, you MAY be able to ASK to borrow a PRIVATE charger built at some dealership, that is locked behind locked gates when the business is closed. Money spent on building out the Supercharger network isn’t magically going to have been spent building out some mystical high power public network that currently doesn’t exist. Other car companies have already proven that, since they haven’t put their money into building out public charging infrastructure either. Why do you hold Tesla to an insane standard of spending their money to build out a public network for everybody, when not a single other car maker has done that? You are angry that Tesla has gone and built a network of chargers everywhere — far, far beyond anything any other EV maker has done. And you… Read more »

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2 years ago

ffbj

Right. Well to me it is an example of our own self-absorbtion, whereas if we want something to happen, in this case access to a supercharger system we have not even paid for, we will rationalize the situation to make it appear that the entity, in this case Tesla, that blocks the fruition of our desires, is the villain.

‘The fault in ourselves, not in their superchargers.’

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2 years ago

rik

As a participant on the SAE J1772 committee developing a DCFC standard, Tesla offered their Supercharger protocol and connector design to the SAE. The SAE refused and instead adopted the Frankenplug CCS charger as the SAE DCFC standard.

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2 years ago

Hari

Tesla is doing everything in their power for the adoption of electric mobility. They put out an open invite to everyone who wants to use their ‘far superior’ charging infrastructure with applicable cost sharing. The rest of the auto makers were the ones who couldn’t be bothered.

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2 years ago

DGM73

Thanks for the answer Texas FFE.

It clearly seems to me that you should actually blame the other car manufacturers who were only not able to come up with any alternative to Tesla fast charging infraestructure but also did not even tried to find an agreement with Tesla to use its superior technology.

I would say, without doubt, that you should actually be blaming them for not trying as hard as Tesla, while looking Tesla over their high shoulders, not the other way around.

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2 years ago

SparkEV

I would’ve strongly disagreed with Texas FFE until I read about Stewart Alsop. It does take some luster away from Tesla when the company behaves so petty against some nobody.

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2 years ago

Aaron

This “nobody” also publicly bashes BMW at every possible opportunity because of “issues” with his X1. He calls the car almost undriveable. Tesla doesn’t need a crybaby spewing venom all over the place, so I believe they made the best decision for the company.

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2 years ago

Tech01x

Are you privy to what Mr. Alsop said to Mr. Musk?

Various companies decide not to do business with customers all the time. They have a right to do that.

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2 years ago

Nix

We had a long time customer for our family business that was going around bashing all of our other customers in public forums. That customer was using our name, and lots of pejoratives.

We sent a letter “firing” this customer, and they are no longer welcome as our customer. This customer has since then bounced between 4 of our local competitors, 2 of which we work with regularly. Their feedback was that they don’t know how we managed to work with this person for as many years as we did.

Businesses aren’t like the gov’t, where you can attack them and bash them to your heart’s desire, and they still have to send your Social Security checks, give you driver’s licenses, allow you access to the courts, etc.

If this Venture Capital fund owner thinks he can bully his way around, and feel ENTITLED to have businesses enter long-term agreements with him (warranty), he is full of himself.

He isn’t entitled force Tesla to do business with him, any more than he can force his local bar to serve him drinks if he has a history of making scenes in the bar previously.

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2 years ago

Speculawyer

So some rich complainer guy has to go to the used market to buy his Tesla? Boo-hoo. Non-event.

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2 years ago

Pushmi-Pullyu

I just read a few of Stewart Alsop’s posts, unrelated to the Tesla issue, to see if his petty, sense-of-entitlement filled rant (“they didn’t even provide real food!”) was an aberration on his part.

I wasn’t. Every post I see is the same kind of petty, extremely negative, sense-of-entitlement filled rant about how some company or other isn’t falling all over themselves to cater to his specific, individual desires.

I think any responsible company CEO would have been well advised to do the same as Elon Musk did here. That jerk of a blogger would almost certainly have used his ownership of a Tesla car as an excuse to find even more things to post public, biased rants about.

Kudos to Elon for doing the right thing, and cancelling that bloviating narcissist’s order.

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2 years ago

Speculawyer

“predatory business practices”?

Oh do tell. I want to learn how an EV company, an industry known for bankruptcy more than anything else (See Think, Aptera, Coda, Miles automotive, Fiskar, Phoenix, Wheego, GreenVehicles, NMG, etc.) has gotten so much business power that the are ‘predatory’!

That ought to be a laugh.

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2 years ago

Speculawyer

Meh. Tesla is stumbling. Super cheap gas prices are scaring off investors. An overly complex Model X was a mistake such that it was much delayed and ramping up production very slowly. That’s the way it goes.

But this shall pass. They’ll fix their issues with Model X and get more of them out the door. And the Model 3 hype will grow during the next month. And oil prices will eventually stabilize and start moving up. However, the oil prices will only go up slowly . . . it will take a while to burn off (literally) this oil glut.

Tesla has a great charging infrastructure but nobody is allowed to use the chargers except Tesla owners. Tesla owners have to pay for those chargers up front even if they never use them. With that kind of overhead Tesla is never going to be able to compete in a competitive market.

Yeah, and Chevy buyers pay for the all the Chevy ads even though they already have the car and may not plan to buy another Chevy. So what? Companies use proceeds from customers to pay for marketing to get more customers. It’s called business. Sounds like you’re just sore that your crappy EV can’t use the Tesla superchargers.

Tesla’s approach says you either pay to build the infrastucture, or you can’t use it. It’s a very sensible approach, because a good charging network has to have both coverage and capacity. You have to keep filling in holes, and you can’t slow the network down much under load.

At any kind of reasonable volume, I don’t see any significant disadvantage to any manufacturer that wanted to build and manage its own charging network. Capacity and reliability are so important, that a bad outsourcing deal could destroy sales. And at this point, nobody else is providing any chargers that would work for long-distance travel, so Tesla has to do it anyway.

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2 years ago

Nix

Literally every single other car maker has been invited to make their cars compatible with the supercharger network. To date, not a single car company has taken up Tesla’s offer.

Other car companies have all the choice in the world to install whatever charging standard they want on their cars. Each car maker chooses what standards they build their cars to be compatible with. None have chosen to install Tesla compatible connectors, despite Tesla offering to work with them all.

So other companies of their own free will have decided not to give their customers cars that are compatible with the Tesla supercharger network. And you blame Tesla for the choices these other companies have made????

The only folks how have not “allowed” their customers to charge on Tesla superchargers, are the companies who built EV’s that don’t include charging hardware compatible with Tesla Superchargers.

LOL! The Supercharger infrastructure is probably one of the biggest competitive advantages that Tesla has!

Sure, GM can build the 200 mile Chevy Bolt for a reasonable price and it will attract some interest. But if you want to really drive it a long distance, you will have to rely on a small number of 50KWH CCS chargers that are haphazardly placed and poorly maintained.

With the Model S, Model X, and upcoming Model 3, the Tesla consumers will have access to a nationwide network of SuperChargers that can charge at up to 135KW and have been carefully situated such that (almost) all major long distance routes are covered. The Tesla SuperChargers are carefully monitored such that if Tesla sees that a station is getting a lot of usage they can add more stalls to that station or add another one nearby.

So which would you pay more for? A 200 mile Chevy Bolt that relies on an unreliable haphazardly placed 50KW chargers? Or a maintained network of carefully placed 135KW SuperChargers? Duh.

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2 years ago

pjwood1

Buy low, sell high.

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2 years ago

DonC

Sounds like my friends who bought Enron on the way down. Screaming deal! LOL

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2 years ago

Nathanael

Enron was an actual fraud.

One way to beat the market is to avoid those. 🙂

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2 years ago

Three Electrics

At this point more Mirai have been produced than Xs. I expect that situation to reverse at some point in 2016.

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2 years ago

jelloslug

How many Mirais have been made?

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2 years ago

ffbj

Making them is one thing, selling them is another. Tesla has probably sold more Model X, as Toyota can hardly sell them at all. I saw they suspended sales in CA, due to the inability to fuel them up. No such difficulties for the Model X.

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2 years ago

Philip d

According to Toyota they “sold” 700 Mirai’s in 2015. Of course that was over a 6 month period to the Model X’s 2 months. And most of those went to Japanese fleets.

Also we don’t know for sure how may Model X’s were delivered in January but the estimate is around 370 with 208 being delivered in December. And none of these were fleet sales.

So if we average monthly delivery sales for the Mirai and ignore the whole fleet sales thing, 117 were delivered per month for 6 months.

If the Model X has delivered 578 units in 2 months then they have delivered around 289 a month for 2 months.

So at early ramp up the Model X has outsold the handbuilt Mirai 2 to 1.

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2 years ago

jelloslug

At more than double the selling price I might add…

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2 years ago

DonC

If Tesla was a higher quality manufacturer with a higher quality development process you wouldn’t need redesigned parts or tweaking production for fit and finish. Some things will always slip through, and no doubt some parts which are thought to be fine today will fail down the road — that always happens and can’t be helped — but parts and basic production quality should be addressed before the car is released or at least caught in IQC.

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2 years ago

Aaron

That would be true under normal circumstances, but due to factors out of their control (a vendor who couldn’t come through with a workable lift design for the Falcon doors) they had to rush a solution from another vendor. This caused significant unforeseen design changes in a very short period of time.

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2 years ago

Saint

I agree. They should replace those defective ignition switches before production starts. Air bags too! They should follow VW or GMs example.

Credit Suisse ($CS) shares are back at 1992 levels – no typo! – a “great” investment. And that’s even without including inflation.

So, all their prop stock picks and estimates shpuöd be viewed with a lots of skepticism.

They should bring their own house in order first.

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2 years ago

james

Tesla haters amass!

I’m taking names. Just because it’ll be fun to say how wrong each one of you was when Tesla furthers the EV into the mainstream.

Reminds me of the whiners in Seattle who protested loudly when we were planning to build a new football stadium. Now, they’re on social media stating they’re the world’s biggest Seahawks fans!!! L 🙂 L

Cities are now building football stadiums costing three times as much.

Also reminds me of Lynden LeRouche, Scientology, and Communist whackos I hear deriding America as “evil”. Since they feel as they do, I sure wish they would please leave ASAP. We both would be so much happier!

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2 years ago

tftf

“…when Tesla furthers the EV into the mainstream.”

What mainstream? Did you have a look at the Model X and S prices?

You must confound Tesla with Nissan-Renault or other companies who acutally offer mainstream EVs at $25-50k.

Tesla keeps talking Model3 at $35k base. Talk is cheap.

I will believe it when I see it – and by then dozens of other car makers will offer long-range PHEVs and EVs in all price classes.

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2 years ago

james

tftf, you believe auto companies are like tech companies. You remind me of my 10-year-old child, as do many of you Tesla critics. In the tech industry, a new iPhone is in the pipeline each year. If you bought last year’s Intel processor, it’s already outdated this year. Auto manufacturing is a whole other animal. Designs must be finalized, body dies must be designed and built, thousands of small and large, heavy and lightweight parts from plastic manufacturers, metal suppliers…down to the last tiny bit, have to be ordered and the entire complex assembly process takes place over dozens of acres, not a lab somewhere in China. Battery factories need big business deals, huge real estate deals involving state governments and foreign laywers. The sheer scale of what Tesla is attempting is unprecedented in the last 80 years. You wake up one morning and expect a Model 3 to pop out of the toaster! You crack me up! You forgot no private auto company has attempted and succeeded in starting a car company on American soil since the Dodge brothers started Chrysler 80 years ago! Chrysler is now FCA, owned by Italians and barely hanging on! If it takes 5… Read more »

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2 years ago

tftf

“Battery factories need big business deals, huge real estate deals involving state governments and foreign laywers. The sheer scale of what Tesla is attempting is unprecedented in the last 80 years. ” You (still) seem to believe everything Tesla says or announces. Here’s a reality check with a few questions for you: – There is no giant battery factory. When will most financial media finally report that $TSLA talks about elephants (Gigafactory 1, 2, 3…) yet only built a mouse (battery pilot plant, just 14% of total factory size, no possibility to equip 500k+ cars/year and storage units with that plant). How to fund that huge gap? Look at Tesla’s balance sheet and other upcoming obligations (Model 3 etc.). – When will Tesla acknowledge and lift the fog about Model X production and QA problems (for example, Tesla kept talking about “seat problems” in August 2015 and didn’t mention severe issues with the falcon wing doors – a CEO pet project). Only a lawsuit between Tesla and the door parts supplier brought some light so far. – When will Tesla actually sell the Model3 and at what prices? Both “late 2017” and “$35k base” sound more unrealistic than ever at… Read more »

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2 years ago

Pushmi-Pullyu

So tell us, tftf, just how much do you have invested in your TSLA short position?

As you are one of the highest volume anti-Tesla FUD posters on Seeking Alpha, I hope you’ll pardon me if I find your opinions and cherry-picked facts to be more than slightly biased.

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2 years ago

tftf

Further: “tftf, you believe auto companies are like tech companies.”

Very funny. I actually kept warning about this analogy for years. Tesla will be buried in very heavy cap-ex which requires more debt and/or dilution:

Of all the sources out there, seeking alpha has got it wrong on TSLA more times than any other source.

You might as well post those links with the title “Click here to see what absolutely positively WILL NOT go wrong with Tesla”.

These are the same guys who said the Roadster was vaporware, and would never get built. And the Model S was vaporware, and would never get built. And the Model X was vaporware, and would never get built. And are now saying the Model 3 is vaporware, and will never get built.

See a pattern here?

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2 years ago

sven

LOL!

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2 years ago

tftf

“Quoting seeking alpha for a green industry stock, is like quoting the clan for Black History month. Both instantly discredit you.”

Maybe you didn’t get that SA is user-contributed content where both TSLA longs and shorts post their opinions.

TSLA trading at $18-30 was a very different value proposition – not to mention the dangerous risk-on-square choices Tesla part-time CEO (another huge proble, Tesla should have long installed a COO to keep their house in order, more focused and with realistic deadlines) made since the IPO and launching the Model S.

I invite you to actually read the two links above where I detailed several issues with Tesla (mainly regarding the company/valuation, NOT the car).

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2 years ago

Nix

Maybe you don’t get that opinion pieces of people who post on some website isn’t a legitimate source.

It is like me posting a link to something Pushi posted, and then claiming that proves I’m right.

I will repeat it again. The bogus junk posted on SA has been so consistently and badly wrong over and over, that it is more of an indicator of what won’t happen with Tesla than what will happen. Anybody quoting SA has instantly discredited themselves.

You are simply regurgitating the FUD spewed by some idiot who bases his math on stuff that starts with “I estimate”, and closes with Disclosure: “I am/we are short TSLA.”

If those phrases don’t raise massive red flags for you, then I can’t help you being gullible, and buying into more FUD from a website that is infamous for being wrong about TSLA.

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2 years ago

Nathanael

“By the time Tesla scales up (best-case scenario) all large car makers will offer dozens of PHEVs and EVs – and there may be new entrants such as Faraday or Apple.”

Nope. You would have expected the large carmakers to do that. But they didn’t. They have been making mistake after mistake. How many BEVs are there with >200 mile range? Because that’s where the market is. How many have properly thermally-managed batteries? Because that’s essential. Et cetera.

As for Apple and Faraday, they have exactly the same problems scaling up as Tesla does, but they are *8 years behind*.

Does Tesla have huge capital requirements? Yes. Will they need to raise debt or equity? Yes. At the moment the plan for 2016 appears to be secured debt: Tesla is borrowing against its land, buildings, and equipment.

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2 years ago

lee

@james +100

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2 years ago

ffbj

James, back on stride.

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2 years ago

Speculawyer

There is no contradiction between realistically acknowledging Tesla’s current problems and Tesla having a great long term future.

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2 years ago

Speculawyer

“Redesigned Parts” . . . a sad admission of failure. 🙁

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2 years ago

Tech01x

Standard part of rolling out vehicles. The Model X breaks a lot of new ground, so this is expected. Of course, the other option is stagnation which is what we get with other automakers – they show concepts, but what actually makes it to the field? Tesla pushes everyone forward.

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2 years ago

Speculawyer

Indeed. But Tesla broke too much ground. And in areas that are not all that important. Do we really need fancy pedestal seats? Do we really need fancy falcon-wing doors? I guess they need those things to help rationalize the $80K to $120K price.

But what we really need is cheaper batteries, chargers, and controllers. What we really need is the Model 3. I’m glad the Model X is (mostly) done so they can go full speed on the Model 3. KISS!

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2 years ago

Nix

You have answered your own question. The Tesla business model has always been clear ever since Elon released the “Secret” plan years ago. They start by burying the extra cost of an expensive electric drivetrain into highly exclusive super-cars that compete in a price bracket that can support the expensive drivetrain. That means features you would never find in cheap entry-level vehicles. This launches the industry, driving down prices for future generations of EV’s that can then be built for lower prices to compete in lower price brackets. Can they build a car that doesn’t have advanced features, and is stripped down to keep it simple? No. Not yet. That was the whole point of the “secret plan”. Tesla is starting at the top, because they can build a competitive car at that price point using current battery and drivetrain prices. As battery and drivetrain prices drop (gigafactory, etc), then the numbers will work to build an entry-level luxury car that is targeted to compete with a BMW 3-series pricepoint of vehicle, with a drivetrain and charging network that can compete with gas. Will they be able to KISS, and built a cheap $15,000 dollar stripper at that point, with… Read more »

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2 years ago

Speculawyer

Oh, I agree. I just think they shot too high with the Model X. And Elon publically admitted it himself so it is not like I’m saying anything completely crazy.

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2 years ago

Nix

That is true, but they also can’t shoot too low either. There is a limit on how simply they can go, and how low they can shoot. The Model 3 won’t be simple the way a Honda Fit is simple.

How the doors work out in the long term is still too early to tell. They could end up being as culturally iconic as rear suicide doors on classic Lincoln Continental’s. Or they could end up being judged as harshly as 3-wheeled Reliant Robin’s.

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2 years ago

Nix

If you drive a car from any major manufacturer, you are driving an entire vehicle of redesigned parts.

Completely new parts are the exception in the automotive industry, not the norm.

Even when GM builds a revolutionary car like the Volt, they start with a chassis from their existing line of gas cars, and an engine from their gas cars. Each of which are the product of endless re-designs stretching back decades.

Redesigned parts are the norm in the automotive industry. Why is this suddenly a “failure” for Tesla not to be magically immune to the same production realities as every other singe auto maker?

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2 years ago

Speculawyer

The failure here was in assuming too much risk in trying to do such fancy things. All complexity of the Model X delayed it by over a year and are making it very difficult to produce. Certainly redesigned parts are part of life but we are talking about redesigned parts that never even saw the light of day except in a few very early models. KISS!

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2 years ago

Pushmi-Pullyu

Speculawyer said:

” ‘Redesigned Parts’ . . . a sad admission of failure. 🙁 ”

That seems rather more negative than is called for. Don’t other auto makers at least occasionally have the same problems when starting production of a new model?

I think it is an indication that Tesla still needs to mature as an auto manufacturer. Not too surprising, as they started work on their first wholly in-house automobile design only 8 years ago.

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2 years ago

Nathanael

The entire bumper assembly for the Model S was redesigned within the first three months. The entire hydraulic braking system was redesigned in mid-2015 (electric assist replaced power hydraulic assist).

As a new car company, Tesla has had a *lot* of redesigned parts. Even something as little as the side mirrors had the parts redesigned *twice* within the first year. Roadster had even *more* redesigns (starting with the elimination of the gearshift and the elimination of the two-speed transmission).

Teething troubles. The entire plan was to get this sort of stuff out of the way on the more expensive cars.

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2 years ago

Ian

I remember when GM went broke and needed a billion dollar bailout…that was funny

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2 years ago

ffbj

Not for share and bond holders of GM. No, for them there was little humor to be found.

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2 years ago

Nix

*yawn*

Tesla stock is still up a full order of magnitude over where it was before they started Model S sales.

From 2/2013 to today, TSLA is up over 250%, while the S&P is up less than 25% over the same time period.

TSLA is a volatile stock. It has has no less than 8 major reversals, and still is out-performing the market by a full order of magnitude since the Model S went into full production.

If anybody is worried about them because of their stock price only being up 250%, you must be peeing your pants about the S&P 500, which is only up 25% over the same time period.

It is like some folks have never seen a volatile start-up stock before in their lives. And yes, TSLA is still a startup stock. None of the stable old standards in the stock market are seeing growth rates and new product releases in the pipeline anything near what Tesla is still experiencing.

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2 years ago

Texas FFE

The S&P 500 maintains a steady growth supported by earnings. Tesla stock achieved meteoric gains supported by speculation. I have seen many companies, especially the dot coms, achieve the same kind of stock performance as Tesla only to crash just as quickly. Five years ago might have been a good time to buy Tesla but now the S&P is a much safer bet.

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2 years ago

Speculawyer

But as you pointed out, the price of Tesla stock has crashed down from a much higher high.

Now may be a good time to buy in. Electric cars are coming whether you like it or not. And Tesla has some great technology, a great brand, the best charging infrastructure, and a huge battery factory under construction that is supposed to push down the price of batteries by at least 30%.

Is Tesla going to go up or down from the current price? I don’t know. It could go either way. But I see a decent case for both the bull & bear position.

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2 years ago

Texas FFE

The Tesla stock still has no fundamentals. Most of the car manufacturers have price/earnings ratios of around 10 but since Tesla still hasn’t shown a profit it doesn’t even have a p-e ratio. Mr. Musk said that the company may not even show a profit for five years.

Tesla hasn’t seen the bottom of this latest sell off. And even when does the stock may start a long steady decline if it can’t attract investors. Personally I have have an aversion to stock risk and I don’t touch any stock that doesn’t have strong fundamentals.

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2 years ago

Pushmi-Pullyu

Texas FFE said:

“…the stock may start a long steady decline…”

The one thing we can be sure about, with a stock as volatile as TSLA, is that it will never show a steady trend, either up or down.

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2 years ago

Nix

Texas FFE — Sadly, you don’t understand how to read a P/E ratio for a rapid growth company.

P/E earnings are informative for mature companies that are not heavily reinvesting or rapidly growing. P/E has very little predictive value for high growth companies and startups.

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2 years ago

Nathanael

Valuing a “growth” company is all about projecting earnings a few years in the future.

Which is inherently full of assumptions and guesswork.

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2 years ago

ffbj

It is probably wise for most people to avoid volatile growth stocks, such as TSLA.

Regarding where TSLA is going as a stock is mostly speculation. I would say sell at $250, buy it at $150, which is what I just did, just a little bit. I wanted to buy at $40, way back when, but was too chicken.

Tesla reports today. I expect a good report, though I have no clue really. Tesla, the stock, is at a bottom, I believe. I could go into the nitty-gritty of the why’s and wherefore’s, of why I think this, but that would be telling.

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2 years ago

Nix

Texas FFE — Safer? Who buys individual stocks for safety? Are you insane? You don’t buy individual stocks to seek safety. You buy individual stocks in order to take higher risks in order to beat the market. If you want safety, go buy a nice Certificate of Deposit from and FDIC backed bank, or go buy Treasuries. Those are the gold standard in safe investments in the world now. Yes, TSLA is priced based upon where the company is going in the future, not where it was last quarter or last year. And it is growing fast. How fast is the unknown that causes the speculation and the volatility. But ALL stocks are bought on speculation. That is how the stock market works. Old well established companies that aren’t growing anywhere near the growth rate as TSLA have higher convergence between speculators of where their business will be in the future, so there is less volatility. Also much less chance for profit. Buying a volatile startup stock as a “safe” investment! What a laugh! You should stay out of the stock market. You don’t even understand the basics. Try investing in one of these, it is more your speed: https://www.wellsfargo.com/savings-cds/kids/

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2 years ago

Texas FFE

For all your big talk I doubt you actually own any Tesla stock. If you really think Tesla stock is so great put your money where your mouth is. Go barrow all the money you can and buy Tesla stock with it.

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2 years ago

Pushmi-Pullyu

Instead of getting defensive and putting words into Nix’s mouth, you should thank him for giving you some good advice.

So far as I can see, Nix hasn’t claimed to own even a single share of TSLA. But what he actually did say, is the Truth.

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2 years ago

Daniel

@ Texas FFE, That would be “Borrow” and I don’t know about “Nix” But I personally DO own TSLA stock and am in for the long haul. I bought not long after the IPO so I can stand a great deal of volatility.

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2 years ago

Texas FFE

Congratulations and good luck, seriously. I wish Tesla would change their business practices so I could get back onboard with them.

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2 years ago

Nix

Believe me, there is no company in the world who is nervously chewing their fingernails praying you will “get back on board with them”.

Plenty of folks throughout history have missed the boat on investing in successful companies. The correct term being “THEY missed the boat”. The boat didn’t miss them.

Bye-bye, won’t be missing you.

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2 years ago

Daniel

People who “Borrow” cash to invest in high risk propositions are those we see jumping out of windows when the margin call comes.

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2 years ago

Nix

Ah, so funny! The little troll is so concerned with investment “safety”, that he is now advocating people taking leveraged positions!!